Composition Consulting

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The Role of Structural Design in Business Performance

In a fast moving, technologically driven market place, its essential that organizations master change management. An organization that has invested in learning the architecture of change management has a significant strategic advantage over their competition. The key to capacity development and efficient investment of resources into a management strategy is to have clearly defined objectives and principles to organize around.

The Composed Organization

How the organizational goals and component parts impact each other is the focus of the structural approach to organizational design. The strategic composition that results from this approach is designed around the components of values, business strategy, and managerial strategy. Each element of the whole is evaluated in terms of its capacity to advance the organization towards its goals or undermine the success by creating oscillation.

Developing the Match

Each one of these component strategies are unique to the organization. As a unique arrangement of your organization, business, or project the compositional design will determine the actions that are most effective and efficient. The most important relationship to organize around is the match between what the market wants, and what the business is offering. If there is a mismatch then top line growth begins to decline.
This mismatch often requires a re-evaluation of the companies business strategy. Too often, managers and executives react to the change in the market by “Re-Doubling our efforts” and a motivation to work harder. Or they focus on “Customer Service Initiatives”. In the existing structure of the business, this becomes an efforts in manipulation of their remaining customers into buying more of what they do not want. Similar to assessing the performance of a race car that is not handling well, the company’s’ overall design must be re-examined. To work harder in this structure is the same of driving faster in a car with poor alignment. As the speed of action increases, the drama increases and catastrophic decisions become more likely.

When the initial reactive initiatives have failed, the tendency is then to blame poor organizational performance on the inadequacies of the staff performance. Keeping in mind that in our scenario it is a mismatch between the market place and the offering of the company, it is misplaced to lay blame on the sales staff for poor results, production for over producing, and middle managers from not getting the job done. Keeping with our race care analogy, we are now blaming the driver for poor performance. A re-design of the organization may be appropriate to address competing forces leading to inadequate results.

The Match is the Key

When the overall design of the company is organized around the match between market motivation and offering a sustainable business is created. Their must also be a match in terms of values of the company with the customers. When company values drive the business strategy and management strategies then personnel involved with the daily operations are in best position for high performance. Their is a consistency that is felt by the customers. Their is a sense of credibility as the way the business does business is consistent with what is espoused as important. The credibility supports the development of long term customer relationships and customer satisfaction.

The Effect of Inadequate Structure on Company Moral

Without this organizational hierarchy, performers take on greater workloads and others become demoralized as they are no longer able to support the company as they would like. The company loses its spirit, and the focus becomes on selling a product or service and not on the impact that offering makes on the customer, community, and company staff.
When dealing with lagging company moral, look to the design of the organization first. Personnel, like race car drivers, are expensive and have valuable experience. Before replacing personnel, re examine the competing forces in the company and the role of the organizational structure in producing those dynamics.

Learning to Build Momentum

Adequate organizational structure supports the building of momentum, rhythm, allowing for spacing of change. This approach helps to sustain projects over longer periods of time, balancing resources and cash flow. When poor performance is a result of inadequate skills or orientation, improvements through training will be more successful as the whole organization supports the performance.

The Unique Composed Organization

As stated earlier, each organizational design is unique. Although there maybe similar component parts, it is the arrangement of these parts that produce the unique offering of the business. This “USP” becomes the foundation of the companies marketing, describing what is unique about the companies approach, differentiating from the competition.

Other approaches that suggest each company should look like the leader in it’s industry and then produces “To Do” lists to do what other “successful” companies do, misses the point that each organization is unique. There may be similar products and services. However it is the relationship of the values of the company, its impact on what products and services are offered and how the products and services are offered through the company operational strategy that is the unique selling point. Without this differentiation, a company becomes a “Me Too”, destined to compete solely on price. This discounting ultimately results in a race to the bottom and long term viability of the organization is undermined.

Leading the Composed Organization

As the leaders of the organization, the executive and management team plays an integral part of the composition of the company. Through strategic planning a company will have a deep understanding of the impact of each part of the company on the overall goals. Each participant has a clear understanding of their role in producing the product or service being purchased by the customer. Management is quickly able to asses the effectiveness and efficiency of the operations. If your management plan does not operate this way, consider the strategic composition.

The strategic composition is a record of the structure, the arrangement of the parts to the whole, and acts as the musical score of the operations of the organization. Evaluate common practices in strategic planning and what becomes obvious is the current state of the business operations is not taken into account. Goals are clearly stated and the logical actions to take to achieve the goals are expressed. However, conspicuous in its absence is a true, honest assessment of what is happening now in terms of overall outcomes, component contribution and patterns of results over time.

The Strategic Composition and Leading Change

This capacity for management to observe without assumption, to look first and then understand is not the norm. It is our experience that most managers are invested in looking like they know before they know. The strategic composition supports the management in a deep understanding of what is happening and why. Where to look in the organization for change gives the management team a strategic advantage in making successful changes towards improving the match, improving business processes and training staff in efficiency.

When a strategic plan does not take into account current reality the organization is less likely to succeed. Without observations and measurements of current reality, the tendency is towards fiction. Actions based in other than reality are an exercise futility.